EMPG was formed by Mr O'Callaghan's $5bn (€3.9bn) merger of its Riverdeep e-learning company in late 2006 with US school textbook company Houghton Mifflin (HM) and their subsequent $4bn acquisition last year of Harcourt Education from Reed Elsevier.

The stake was worth $300m (€237m) at the time Reed Elsevier took it on as part of the Harcourt deal in July 2007 -- just weeks before the US subprime crisis erupted. Reed Elsevier's valuation on its stake points to an overall equity valuation of €127m for EMPG, which has a debt mountain of over $7bn.

Value

EMPG said it was a matter for individual shareholders to establish the level at which they value investments on their books. It said that "across our group of shareholders, investors carry their investments at varying prices at up to $10" a share. The top level implies an overall equity valuation of $2.5bn (€2bn) for the group.

Reed Elsevier was forced to shave $500m off its original asking price and accept the $300m stock payment to appease Mr O'Callaghan's bankers, Credit Suisse, Lehman Brothers and Citigroup.

The Anglo-Dutch group's new "carrying value" of its EMPG stake was revealed in its annual results yesterday, which showed it posted a 21pc increase in operating profits to £1.38bn (€1.56bn). Sales at the company jumped 16pc to £5.3bn.

Last week, Standard & Poor's became the second ratings agency in recent months to downgrade its stance on EMPG. The firm cut its corporate ratings on the publisher from B- to CCC -- or 17 levels below its top-notch AAA rating.

EMPG said yesterday the group was in full compliance with all of its financial covenants, and does not have to refinance its debt before 2014.